“The community, the services it provides, and the businesses it operates would all be devastated by the closure of the bank accounts in circumstances where they have been unable to obtain alternatives,” Dunningham said.
“It is appropriate that those are sustained while the applicants’ claim is determined.”
She ruled the matter be heard at a half-day hearing. A date for this is yet to be set.
Dunningham’s judgment explained BNZ’s decision to drop Gloriavale stemmed from the Employment Court in May finding three Gloriavale members were employees from age 6 until they left the exclusive community.
This decision enabled the former Gloriavale members to proceed with a “breach of duty” claim against Labour Inspectors, who concluded Gloriavale members weren’t employees, so the inspectorate had no jurisdiction to consider their employment-related claims.
BNZ on July 8 wrote to Gloriavale saying it believed that continuing to provide it with banking services would be inconsistent with the bank’s human rights policy.
“Under this policy, BNZ must not tolerate, or be complicit in, any activities that contribute to adverse human rights impacts,” BNZ said.
It gave Gloriavale three months to find another bank before all accounts related to the community would be closed. These include accounts related to its farming operations, other businesses, school, pre-school, midwifery service, and accounts used to cover medical and laundry costs.
Come October 7, Gloriavale hadn’t secured another bank, but believed it was making progress with ASB and Kiwibank, so BNZ extended its deadline to November 30.
On October 17, Gloriavale informed BNZ that ASB declined its request to open accounts for its commercial entities.
Then on November 17, Gloriavale told BNZ that Kiwibank wouldn’t support one of its companies – Canaan Farming Dairy – and was still working through decisions on other accounts.
“It is evident now that the transfer of banking services will not be complete by 30 November … and in respect to at least some entities, will not be achievable at all,” Gloriavale’s chief executive Phil Jamieson told BNZ.
He asked BNZ not to pull banking services in instances where alternative arrangements hadn’t been made, stressing Gloriavale “has demonstrated its willingness to address the issues it faces”.
BNZ responded saying it is its contractual right to terminate the provision of banking services.
Gloriavale’s lawyers hit back, rejecting the suggestion the community was contravening human rights, and arguing the timeframe BNZ had given it to move banks was too short.
BNZ didn’t budge, so Gloriavale went to court.
Lawyers representing Gloriavale, Richard Raymond KC and Ayleath Foote, said that if the accounts were closed on November 30, the community wouldn’t be able to make payments for food, power, rates, and medical expenses.
They noted around 570 people, including over 350 children, the elderly and disabled, would be affected.
BNZ’s lawyers, Will Irving and Lisa Dick, were critical of Gloriavale for waiting until the day before their accounts were due to be closed before going to court.
“By seeking relief for the court on such an urgent basis, the applicants appear to have deliberately denied the bank the usual protections afforded in such an application,” Dunningham said, summarising one of BNZ’s arguments.
She accepted Gloriavale’s argument that “there must be reasonable cause to terminate a banking relationship”, noting the “importance of banking facilities to function in today’s society”.
She believed examples of these “reasonable causes” that BNZ provided in its terms and conditions were fair.
However, Dunningham said it was unclear whether the human rights argument BNZ made was applicable to all of the Gloriavale-related entities it wanted to close the accounts of.
“For these reasons, at this very preliminary stage, I am satisfied there is a serious question to be tried,” she said.
A date is yet to be set for a hearing.
In the meantime, BNZ has to keep accounts related to Gloriavale open.
